Back In Cash – October 11, 2011

[Billy]

Forum Clusters 111011.xlsx

Statistics and probabilities are what they are. The IWM robot interprets them most objectively and concluded that enough was enough with the long trade. Time to book profits at the open today. End of story.
Note that there is no edge found with shorting , the edge is to just stay in cash. We must admit that the last 5 days gain of + 13.76% from the 10/04/2011 low is likely too far too fast. The robot could catch a good chunk of it but anticipates that the move is over for a while.

From a multi-pivots viewpoint, I wouldn’t be surprised that a new opportunity to enter near our initial entry (64.78) , the 5-day VWAP (64.83) and YS1 / WPP (both 64.40) might come soon, as I’ve mentioned many times recently. A decisive breakdown below monthly pivot (67.14) and the first support cluster would precipitate the ideal pullback. And we can expect institutional selling pressure at the declining 50-day moving average, now at 68.86.



The GDX robot remains neutral and is still waiting in cash.
Billy